Special Employment Considerations for Government Contractors

Federal contractors and subcontractors must adhere to an even higher level of equal employment opportunity laws and regulations enforced by the U.S. Department of Labor’s (DOL) Office of Federal Contract Compliance Programs (OFCCP). The purpose of the OFCCP is to enforce, for the benefit of job seekers and wage earners, the contractual promise of affirmative action and equal employment opportunity required of those who do business with the Federal Government.

The following three equal employment opportunity laws are enforced by OFCCP:

Executive Order 11246, as amended (E.O. 11246) prohibits discrimination without regard to race, color, religion, gender or national origin and requires affirmative action for women and minorities. EO 11246 is applicable as follows:
–$10,000: Contractors who have “government contracts,” including subcontracts, of $10,000 or more are required to comply with EO11246, but are not required to have a written affirmative action plan.
–$50,000 / 50 Employees: Contractors who (a) have a single government contract/subcontract of $50,000 or more; (b) have bills of lading of $50,000 or more; or (c) serve as depository of federal government funds, and, for each category, have 50 or more employees, are required to have a written affirmative action plan and comply with EO11246.
–For construction contractors, if they have federal construction contract/subcontract of $10,000 or more, the contractor is required to comply with EO11246 but is not required to have a written affirmative action plan.

Section 503 of the Rehabilitation Act of 1973, as amended (Section 503) prohibits discrimination and requires affirmative action in the employment of qualified individuals with disabilities. Section 503 is applicable as follows:
–$10,000: Contractors/subcontractors with government contracts of $10,000 or more are required to comply with Section 503, but are not required to have a written affirmative action plan.
–$50,000: Contractors/subcontractors with a single government contracts of $50,000 or more and 50 or more employees are required to comply with Section 503, and are required to have a written affirmative action plan.

The Vietnam Era Veterans’ Readjustment Assistance Act of 1974, as amended (VEVRAA) prohibits discrimination against veterans protected by the Act and requires affirmative action in the employment of such veterans. VEVRAA is applicable as follows:
–$100,000: Federal contractors/subcontractors with a single government contract of $100,000 or more dated or modified after December 1, 2003 must comply with VEVRAA. In addition, if they have over 50 employees, the contractor must prepare a written affirmative action plan.

OFCCP monitors compliance with these equal employment opportunity laws and their corresponding affirmative action requirements primarily through compliance evaluations, during which a compliance officer examines the contractor’s affirmative action program and employment practices. OFCCP also investigates complaints filed by individuals alleging discrimination by federal contractors and subcontractors on the basis of race, color, gender, religion, national origin, status as a qualified individual with a disability or as a protected veteran.

Recent Cases

Bank of America – As outlined in a September 23, 2013 DOL News Release, a DOL Administrative Law Judge ordered Bank of America to pay almost $2.2 million for racial discrimination against more than 1,100 African American job seekers. The ALJ determined that the bank applied unfair and inconsistent selection criteria resulting in the rejection of qualified African American applicants for teller and entry-level clerical and administrative positions. The case resulted following routine compliance review by the OFCCP back in 1993.

MC Dean – In October 2013, MC Dean, settled allegations that it failed to provide equal employment opportunity to 381 African American, Hispanic and Asian workers who applied for jobs at the company’s Dulles headquarters. A review by the OFCCP determined that MC Dean used a set of selection procedures, including invalid tests, which unfairly kept qualified minority candidates from securing jobs as apprentices and electricians. Under the terms of the agreement, MC Dean will pay $875,000 in back wages and interest to 272 African American, 98 Hispanic and 11 Asian American job applicants who were denied employment in 2010. The contractor will also extend 39 job offers to the class members as opportunities become available. Additionally, MC Dean has agreed to undertake extensive self-monitoring measures and personnel training to ensure that all of its employment practices fully comply with Executive Order 11246, which prohibits federal contractors and subcontractors from discriminating in employment on the bases of race, color and national origin.

G&K Services Co. – On November 4th, the OFCCP announced that G&K Services Co. has agreed to settle allegations that it discriminated against female laundry workers by steering them into lower-paying positions regardless of their qualifications. Under the terms of the agreement, the contractor will pay $265,983 in back wages to 59 female workers who were steered into the lower paying jobs. G&K Services will also extend to the 59 female class members job offers in the higher-paying laborer positions. In addition, G&K Services will pay $23,968 in back wages to 331 male job applicants who were denied the opportunity to compete for open lower-paying laborer positions and make three job offers. The company has also agreed to undertake extensive self-monitoring measures, and review and revise their hiring and pay practices, to ensure they fully comply with the law.